Why Quiksilver, Inc. Shares Soared

Is this meaningful? Or just another movement?

Jun 6, 2014 at 5:40PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Quiksilver, (NYSE:ZQK) were riding higher today, gaining as much as 15% and finishing up 10% on insider buying, and a note about it being a possible takeover target.

So what: Shares of the surf-inspired clothing maker tumbled 40% earlier this week on a dismal earnings report, but now it appears investors think the stock was oversold. CEO Andrew Mooney took advantage of the stock's rock-bottom price by purchasing 100,000 shares at $3.40, while CFO Richard Shields also bought 100,000 shares of the stock. Furthermore, in a research note, UBS said there are still reasons for V.F. Corp, the parent of companies like Timberland, to acquire the beaten-down company.

Now what: Insider buying is always encouraging, but investors shouldn't ignore the recent earnings report. Sales fell 9% to $408 million, while its adjusted net loss expanded from $0.12 to $0.15, worse than estimates of a $0.02-loss. Management also said it expected sales declines for the remainder of the year. Several downgrades followed the report as Quiksilver is getting squeezed by competitors. Wholesale revenue, the company's primary source of income, dropped 15%, a sign that retailers are favoring other brands. Still, Quiksilver's well-known brand family, which includes Roxy and DC, is an asset, and its cheap share price could make it a buyout target, but for now, an acquisition is only a hoped-for proposition. 

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Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

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The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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